BJP win to energise Modi's pro-big biz, pro-foreign capital economic agenda
The Bharatiya Janata Party's (BJP) stunning landslide Assembly election victory in Uttar Pradesh and Uttarakhand is expected to give a massive boost to Prime Minister Narendra Modi's unabashedly pro-big business economic policy agenda, which also places huge emphasis on luring foreign capital — through liberal and wide-ranging concessions — to invest heavily in the Indian economy.
Reacting to the poll results, an upbeat — and visibly jubilant — India Inc expressed confidence on Saturday that the outcome would lead to reforms gaining momentum owing to improved coordination between the Centre and the states. Assocham President Sandeep Jajodia said that one of the important takeaways of the poll outcome is that far better coordination is expected between the country's largest state (Uttar Pradesh) and the BJP-led National Democratic Alliance (NDA) Government at the Centre.
"Mr Modi's agenda on economic development and to take on the challenges upfront has gone down very well with the people of the key states who are looking with a new hope for an economic development of the states. Most of the states are now being ruled by the BJP and its allies and far better level of development coordination is expected," Jajodia said.
"Investors value predictability and stability. The BJP's resounding victory in Uttar Pradesh points to long-term leadership. Markets may well applaud next week [sic]," Mahindra Group's Executive Chairman Anand Mahindra said in a tweet.
Confederation of Indian Industry (CII) President Naushad Forbes said "The Confederation of Indian Industry warmly congratulates the winning political parties in the states of Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh for their performance. By and large the results ensure that the process of reforms would gain further credence, support and momentum at the central level."
Meanwhile, following the outcome of elections to five state assemblies, market analysts have predicted a positive opening for the Indian equity markets on Tuesday.
With the BJP set to return to power in Uttar Pradesh after 15 years and the Congress
gaining the lead in Punjab, market observers were of the view that the victory of the BJP in UP is of most political importance and would infuse positive sentiments in the domestic bourses."Considering the fact that its a thumping victory for the Bharatiya Janata Party, it will be a positive opening for the equity markets. Uttar Pradesh is a standout state and politically most important. It will be giving a lot of political equity to the government and this is going to be positive for the markets," Anindya Banerjee, Associate Vice President for Currency Derivatives with Kotak Securities, said on Saturday.
"We can see a gap up opening in the Nifty — possibly 100 points plus. However, there will be a gap down for the dollar/rupee, possibly at the 66.30-40 levels (indicating strengthening of rupee at the opening level)," he added.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, a spurt is expected in the equities markets post the election results, especially the UP poll results.
"With the UP mandate, the government may further be emboldened to work towards further reforms in all realms of the government which will lead to structural changes in the country over the next seven years," Desai said.
"The rally might propel the National Stock Exchange's (NSE) benchmark 51-share index Nifty above 9,000 points mark or 120 points upward movement."
On Friday, the benchmark indices had closed with marginal gains on the back of a strong rupee, coupled with fresh inflow of foreign funds and positive global cues.
The wider Nifty of the NSE closed at 8,934.55 points — up 7.55 points or 0.08 per cent. Similarly, the barometer 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) rose by 17.10 points or 0.06 per cent to close at 28,946.23 points. (With agency inputs)